Mobile advertising spend in US jumps 76%

Mobile advertising spending in the US jumped 76 per cent to $12.5bn last year, overtaking display ads to become the second-largest online ad format, according to a joint report from the Internet Advertising Bureau and PwC, the professional services firm.

Expenditure on mobile now makes up a quarter of total internet ad revenues, up from 17 per cent in 2013 and more than the 16 per cent share taken by banner ads. Overall online ad spending increased 16 per cent to a record $49.5bn in 2014.

"Marketers clearly recognise that consumers are leading mobile-first lives and are investing their ad dollars accordingly," said Randall Rothenberg, president of the IAB.

The flood of money pouring into mobile ads comes as smartphones have displaced computers as the primary way Americans consume digital media.

US adults spent more time on mobile devices than they did on PCs for the first time last year, according to eMarketer, the research group. The gap is expected to widen in 2015 to almost 2 hours and 51 minutes a day on mobile compared with 2 hours and 22 minutes on desktops and laptops.

"High double-digit growth in mobile advertising is a reflection of the continued shift in consumer behaviour away from desktop and towards mobile devices," said David Silverman, partner at PwC US. "A prominent rise in social, a significant mobile activity, is driving growth in advertising revenue as consumers spend more time connected."

Social media ad spending reached $7bn, up 57 per cent from 2013. Digital video rose 17 per cent to $3.3bn. Search advertising retained the biggest share of revenues at $19bn, or 38 per cent.

The largest portion of US marketers' budgets remain devoted to television: combined broadcast and cable ad revenues stood at $65.7bn in 2014. But the rise in time spent on mobile devices and a new array of online video services is shaking up the TV market.

US consumers now prefer streaming video content to live TV viewing, according to a new survey by Deloitte, the professional services firm.

With 42 per cent of US households subscribing to services such as Netflix, 56 per cent of respondents said they stream movies and 53 per cent said they stream TV shows at least once a month. In comparison, just 45 per cent said they watch TV programming live when it airs.

The contrast is sharpest among young viewers, with live viewing down to 35 per cent among those aged 26 to 31 and 28 per cent for viewers aged 14 to 25.

"Personal viewing experiences and the ability to consume media at your own pace is significantly impacting how US consumers value their content devices and services," said Gerald Belson, Deloitte's US media and entertainment sector leader.

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